SINGAPORE – The Singapore dollar hit an all-time high against the Malaysian ringgit yesterday, Channel News Asia reported.
The Singapore dollar reached a record high of RM3.1964 at 1.48pm yesterday, largely due to strength in the Singapore dollar, before easing to RM3.1950 later in the day, the news portal said, quoting head of FX analysis at MonFX Simon Harvey.
“There wasn’t one individual headline catching event, but instead the technicalities of Singapore’s monetary policy that created this all-time high,” he said,
The FX analysis reportedly said sentiment around China also helped.
Harvey said news that United States President Joe Biden was weighing cutting tariffs on Chinese goods helped lift the yuan to its highest since May 5.
“With the yuan holding the largest share in Singapore’s S$NEER basket, the rally in yuan dragged the Singapore dollar higher too as currency traders looked to offset the depreciation in the Singapore dollar relative to yuan with other currencies.
“This saw the Singapore dollar strengthened against other major trade partners, including US dollar (+0.49%), Malaysian ringgit (+0.13%), Hong Kong dollar (+0.47%) and Japanese yen (+0.05%), such that the S$NEER exchange rate continued to drive higher in line with (Monetary Authority of Singapore – MAS’) preference,” he said.
As at 9.01am, the ringgit stood at 3.1925/1955 against a Singapore dollar.
MAS, the republic’s central bank, formulates monetary policy by setting a path for the S$NEER –Singapore dollar nominal effective exchange rate – policy band to ensure price stability in the medium term.
Singapore has tightened its monetary policy stance in April 2022, which builds on the policy moves in October 2021 and January 2022, aiming to slow the inflation momentum and help ensure medium-term price stability.
It was announced yesterday that MAS Core Inflation rose to 3.3% on a year-on-year basis in April 2022 from 2.9% in March, driven by higher inflation for food, retail and other goods, as well as electricity and gas.
The jump in April was reportedly the highest level since February 2012. – Bernama, May 24, 2022
